By : Noah Lovitz


"A home purchase loan with a higher balance than the free market value of the home."
("Underwater Mortgaging", nd)

Problems that can occur due to "Underwater" Mortgaging

  • Difficulties in selling your home

  • Not being able to refinance

  • Higher risk of foreclosure
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(McDaniel, 2009)

Why is it called "underwater"?

People call it “underwater” because when the price of the house cost less than what they bought it for it’s almost like the house has sunken under the price the owner is paying for
(Underwater Mortgage, 2013)
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(2008, nd)
When people buy a house they are gambling their money, because the price of their house could decrease. Although the price decreases the home owner still has to pay that money, and this cause the house to go up for foreclosure. So people wanting to buy a house should check the probability of their house going underwater.
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How does this relate to Globalization?

“Underwater mortgage is important in the discussion of globalization because when people’s house go “underwater” they are paying mortgages that cost more than the actual value of their house, so even if they did sell their house they wouldn't be able to make the money for the mortgage”.

  • This puts a lot of house owners at risk for foreclosure
  • Also makes the house marketing plunder